Category Archives: Training

Posted onAugust 29, 2016|Comments Off on What is your “Training Base Load?”

You wake up in the middle of the night, flip the light switch, and – miracle of miracles – the light comes on. The power company maintains a “base load” on the grid for just such occasions, and it is indeed a miracle. As the day begins a huge coordinated team starts bringing more electrical generation capacity on the line to brush your teeth, brew your coffee, and perhaps power your ride to work. But for the quiet overnight hours there is still a small power plant humming away, ready to take the load.

If your company has the luxury of a dedicated training department, they are your human capital power plant. They probably host a variety of courses throughout the year. They put a fine polish on technical or soft skills, help save minutes during the holiday rush, and develop people for the challenges of tomorrow. They also probably maintain the “training base load,” those compliance courses that absolutely must be taught if the company wants to stay in business.

As a training manager, it is helpful to know exactly how much of your time and budget must be dedicated to the base load. Across your catalog, where do you draw the line? Certainly, compliance training is on the list. What about on-boarding? Harder to know, especially if your hiring cycle is unpredictable. Technical training may make the cut, especially if there is a cyclic requirement, such as annual proficiency training. Finally, those “fun” courses, like conflict mitigation, communications, strategic planning, and meeting management, which can probably be cut (in the short term) without much fanfare.

Base load courses: compliance and any other training mandated by law. How many times do you convene each year? How many staff hours are spent preparing and delivering for each convening? What other materials must be purchased and prepared for each class? Calculate what percentage of your annual budget goes to maintain the “base load.”

Refresher and proficiency courses: same drill as above – who teaches what, when, and how much does it cost in time and materials. The resources spent here directly offset lost work and potential injury. It is good to know this number when the executives come calling.

New-hire training (both on boarding and technical skill): this can be the thorniest variable depending on your workforce. Some industries with high turnover spend a lot of time with this category.

Company-specific “mandatory” training: who teaches, what, and when – do the calcs. (Can some be eliminated? Outsourced? Streamlined? Converted to less expensive or distributed delivery?)

Elective training: all those nice-to-have courses. If you are “fat” in this are, can you justify the continued expense? If you are “lean”, can you justify additional support, balanced against the rest of your categories?

With your new course audit in hand, it will be easy to answer questions when the budget folks come looking for cuts. Solid numbers can make training look like a good bet. Perhaps more important, knowing which percentage of your catalog is non-negotiable can help keep those light on all year long.

And so here we are. You made the bet, took the plunge, and sent your people to training. You spent money on the program, had them off the job for a day or a week, and now with fingers crossed you honestly hope it was all worth it. Like you, I have made that bet many times. Here are some ideas that can help justify L&D for your team.

First, there are benefits for each employee. The links between L&D and employee loyalty, retention, engagement, and satisfaction are well researched. (Wranx has a good article based on various studies.) So, investing in L&D can make your people 12% more effective? Or save you one $50,000 hiring event in a year? Those may be reasons enough to justify a training budget.

Second, ask the employees themselves to estimate the impact.

“With what you learned, how many minutes will you save each day?”

Depending on the topic, each learner will probably save at least 5 minutes per day. If you sent 20 people to training, each making $25 per hour, those collective minutes just added over $10,000 in value for the team this year.* There are many ways to quantify productivity pre- and post-instruction. Pick something that works with your process. Saving 25-30 minutes per person each week is a real win any way you look at it.

Finally, some structured time away from “the grind” can focus everyone on a timely topic and yield real benefits. For example, “the holiday rush” is a good excuse to jumpstart the seasonal effort around a shared experience. A learning event gets everyone “on the same page” using common language and procedures. Standardized terminology and process alignment are both easy shortcuts to performance. Ask yourself,

“What is the cost of one mishandled order in December?”

If an hour spent in training can save a dozen mishandled orders, that hour was probably worth it. (Now, run the numbers and check!)

One last thought: it is better to move past “awareness” and towards L&D that is “hands on.” Real practice with real problems means better performance. Get those hands dirty, but in a controlled and safe environment. Your people will come back with better confidence and skill to tackle the real work. And at the end of the day, that’s really the goal.

Posted onAugust 19, 2016|Comments Off on Make Training Look Like a Good Bet

Make Training Look Like a Good Bet

My last post discussed why learning and development (L&D) should be a budget priority: it is easier to nudge a spinning wheel than to start from zero. In the end, headquarters agreed but still wanted cuts. So to match the 10% workforce reduction, I took a 10% reduction in student load, and absorbed the cuts across my various learning programs.

Still, I kept 90% of my annual budget under threat of deeper cuts. My argument started like this. For an organization with an annual budget of $10 billion US, my L&D team had a budget of $5 million US (with roughly $4 million of that sunk salary cost and $1 million operating cost).

“Would you be willing to bet that spending half of a tenth of one percent in developing the workforce will return at least that amount in productivity over the course of a year?”

Headquarters reluctantly agreed: it was probably a good bet. Looked at another way, my $5 million budget supported a 50,000-person workforce. I said,

“Do you think betting $100 per person on their L&D will return at least $100 as productivity (or just good will) per person?”

Of course – that’s less than nine dollars per month, or 30 cents per day!

When defending your L&D budget, I suggest a similar approach. Get the best numbers you can about organizational budget, the amount directed at L&D, and the size of your workforce. Then do the math, and if possible frame the results as a good bet.

And now, let me know what the answer looks like for your organization!